Why does Mini require a Service Plan?

Why would a company operate at all, if all they can do each year is operate at a loss, that gets bigger and bigger? Seems rather fruitless. I know if my business was putting me millions in the hole every year, Id file bankruptcy and be done with it.

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If their future business was manufacturing stand-alone DVRs, then perhaps. But TiVo has always offered hopes of great profit in the future, once they get big enough for targeted advertising, audience measurement, and software licensing to kick in. (TiVo is a software company, forced to sell hardware to push their software.)

TiVo managed things so that even though they lost money every year, they accumulated no significant debt ever (except for a couple of years around 2001 or so as they switched over to making their own hardware in order to survive). They accomplished this miracle by having a great dog-and-pony show, convincing investors that once TiVo achieved critical mass, large payoffs were possible. TiVo was able to continuously raise money by issuing new stock and having investors pay to keep the company going. Of course, now-a-days the patent litigation has relieved all money worries for several years.

People complain about the executive salaries of TiVo, but those executives worked wonders convincing investors to buy into TiVo's dreams. And with the strong growth of cable company TiVos, both in the US and internationally, TiVo may get its critical mass.

This seems a massive rip off. The main Tivo is the only one receiving the guides and scheduling things. So I don't understand how Tivo gets away with charging so much just to connect a Mini.

Is this a legit thing or simply what it appears like: a massive rip-off?

I've been getting more an more upset with Tivo lately. I pay a huge amount of money to buy the device and to pay for service plan and yet I still have to put up with advertisements within the Tivo itself. I wouldn't mind if there was an "advertisement section" of Tivo where you navigate to and watch the advertisements at your choosing. But popping those things up when I Pause etc infuriates me.

Is the Mini just another way to rip-off the customer? For the first time I'm starting to look at dropping Tivo because of things like this.

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It requires a service plan for the same reason TiVos themselves do--what TiVo really is is a specialized software company, and the monthly or lifetime sub pays for a license to use that software.

I don't have a Mini, so I don't pay for a sub for one, because I'm not using the specialized software they wrote for it to allow it and a TiVo to work together, so I don't need a license to use that software which I'm not using.

If I owned and used a Mini, I'd be using that software and would need to pay them for the license to do so.

TiVo makes its money from the software and patents--the hardware is a loss leader.

The real answer though is.... because they can. TiVo's only real competition is DVRs offered by MSOs. In all cases where an MSO offers a DVR with an extender they charge an extra monthly fee for the extender. TiVo is just following suite. People like to think that they are competing with AppleTV and Roku, but those are secondary competitors at best. TiVo's only real competition is MSO DVRs and when you compare the two their prices are inline.

This seems a massive rip off. The main Tivo is the only one receiving the guides and scheduling things. So I don't understand how Tivo gets away with charging so much just to connect a Mini.

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Same reason you pay a fee for your TiVo unit, ongoing support and maintenance of the underlying software. They should call it a maintenance fee instead of subscription. Just look at the improvements added since the Mini was first released, they need to pay for the talent that continues on the development of the underlying application and features.

That wasn't very nice. It seems this person has real feelings and sticker shock. Why not just assist in relieving those fears with facts in a nice, productive way?

You gotta admit, it's quite shocking when the fees are first explained to a prospective TiVo client. Every time I tell people about the new roamios they simply love it and are very interested......until I get to the cost part, then about 99.9% of them bail out, regardless of whatever tivo-liscious formulas I throw at them!

I think the individual was treated fairly well in the first several responses.

Then she started down the entitlement route and how those greedy fats cats are sitting on their mountain of gold laughing at the huddled masses having to pay a kings ransom for something she thinks should be provided as a right of humanity - or something like that.

You gotta admit, it's quite shocking when the fees are first explained to a prospective TiVo client. Every time I tell people about the new roamios they simply love it and are very interested......until I get to the cost part, then about 99.9% of them bail out, regardless of whatever tivo-liscious formulas I throw at them!

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To me, it's all in how it's positioned.

It's been my experience that what's truly shocking to people is when you sit down with them and help them figure out how much they're currently paying in cable company fees to rent the various DVRs and set-top boxes throughout their houses.

Positioned against the fee that they're currently paying, it's been my experience that it's pretty unusual to find a situation where a TiVo solution (with its hardware and service fees) doesn't end up saving the prospective client money.

It's been my experience that what's truly shocking to people is when you sit down with them and help them figure out how much they're currently paying in cable company fees to rent the various DVRs and set-top boxes throughout their houses.

Positioned against the fee that they're currently paying, it's been my experience that it's pretty unusual to find a situation where a TiVo solution (with its hardware and service fees) doesn't end up saving the prospective client money.

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I agree with everything you're saying and have passed that on numerous times. It seems most people just can't see past the tip of their noses though! It's the wide eyed "I gotta shell out HOW MUCH right now to just record Dance Moms on Sunday night"?!?!?! That gets 'em every time!

Yeah the upfront costs can be shocking. Even with monthly service fees, rather then lifetime, having to lay out several hundred bucks right now is hard for a lot of people. And if you do go lifetime the upfront cost is enormous. I paid nearly $1K for my Roamio Pro with lifetime. There aren't a lot of people who can afford that kind of outlay just for a DVR, even if it does save them money over the long term.

Yeah the upfront costs can be shocking. Even with monthly service fees, rather then lifetime, having to lay out several hundred bucks right now is hard for a lot of people. And if you do go lifetime the upfront cost is enormous. I paid nearly $1K for my Roamio Pro with lifetime. There aren't a lot of people who can afford that kind of outlay just for a DVR, even if it does save them money over the long term.

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If I decide to buy a Mercedes SLS GT Coupe for $200K+ over a Mercedes CLA-Class Coupe for $29,900 then I shouldn't be shocked at the cost. You could of bought the Roamio base model for 1/3rd the cost at $199!

To put this in perspective my iPhone 5S cost me the same $199 as the Roamio but the service contract for 2 years (not lifetime) cost me $2,160 for a total cost of $2,359.00. Each additional year is another $1,080.

Yet I don't see anyone, including pre-teens, getting a bit worked up over it.

But in the TiVo group people are ready to revolt over the cost of a TiVo. And then there's the irony that TiVo has never been profitable and yet gets painted as greedy for it's prices where Apple, with $150 billion in profits, still sells a two 1/2 year old iPad 2 for $399 and is commended for it high margins.

And as for holding it's value while my iPhone 4S was worth $99 after two years a Premiere with lifetime after four years is *still* worth ~$400.

And as for holding it's value while my iPhone 4S was worth $99 after two years a Premiere with lifetime after four years is *still* worth ~$400.

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You got ripped off on the iPhone. I just traded mine in to Amazon for $185. Considering that is almost what I paid for it it seems like a pretty good deal. I know with the contract I actually paid more, but the service fee is the same no matter if you use an iPhone 5s or an iPhone 3G so the fact that you can break even and get a "free" upgrade every 2 years is why most people don't balk much at the cost of cell phones. If they lowered the service fee after the contract expired I think people would look at it different.

TiVos with lifetime also tend to hold a good bit of their value, but not as much as they use to. It use to be that you could sell a used TiVo with lifetime for the cost of lifetime + $50-$100 for the hardware. These days people are selling Premiere units with iifetime for ~$400 making the hardware basically useless. A Premiere without lifetime is worth maybe $40. (You can buy a new 4 tuner on clearance for $60) that doesn't give me high hopes about the resale value of the $600 Roamio I just bought. If in 3 years it's only worth the price of lifetime then I will have paid about $17/mo to own it. Not something I couldn't afford, but not quite the value proposition it use to be.

This whole debate is the result of the ubiquity of credit and the "monthly payment" mentality held by so many people. I think my biggest pet peeve on this topic is cell phones. How many people would own an iPhone or other smart phone if the cellular companies did not subsidize the cost.

Option #1: $99 for the new iPhone 5c with 2-yr agreement....sign me up.
Option #2: $549 for the new iPhone 5c without a contract.....I can't afford that!

Yet, people fail to realize they'll simply be paying a monthly cellular service bill that is about $20 more than it would have to be otherwise. If you don't upgrade that phone right after the 2 years is up, your just throwing that $20 away on your monthly cellular bill.

I would rather have the option of a full price phone with no contract and reduced monthly rates and keep that smart phone for 3 years and save money in the long run.

A Premiere without lifetime is worth maybe $40. (You can buy a new 4 tuner on clearance for $60) that doesn't give me high hopes about the resale value of the $600 Roamio I just bought. If in 3 years it's only worth the price of lifetime then I will have paid about $17/mo to own it. Not something I couldn't afford, but not quite the value proposition it use to be.

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I'm much more optimistic about the Roamio retaining value than I was the Premiere. It has enough horsepower to be adaptable in the future. I expect it will be usable until whatever replaces cablecards comes into the marketplace, which will be longer than 3 years.

[..] get a "free" upgrade every 2 years is why most people don't balk much at the cost of cell phones.

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It's because they don't have to pay $2,359 upfront to get a cellphone!

TiVo is NOT expensive when compared to other things people buy with contracts. I used cellphones as the most obvious example but leasing cars is another. Ever wonder how an 18 year old working P/T drives a new $40,000 BMW?

What TiVo should do is use some of that $1 billion cash to allow payment of Roamio in monthly installments just like cellphones. A Roamio with lifetime would cost $29.99/mo 2-year contract. Or a Roamio Pro + monthly would cost $39.99/mo 2-year contract. $14.95/mo after that.

But I guess TiVo feels that's not the problem. I will say TiVo going after smaller cable companies seems to be paying off. The Virgin Media deal alone has done wonders.